Passive Income Expert: Buying A House Makes You Poorer Than Renting! Crypto Isn't A Smart Investment

0:00 If your goal is to become financially independent at a young age, this is a very controversial thing to say. You probably don't want to go buy a house. Because people typically buy house they can't possibly afford. The bank wants you to do that'cause that's how they make the most money. So you're putting your capital into that house and now it's not gonna be earning thing, it's gonna be sitting idly. And people say, Well, you know, I can buy this house because my mortgage is the same as my rent. Well yeah, but your mortgage is just the same. Starting point. So what comes to mind if I want to be financially wealthy? Okay, so we've got a lot to go through. JL Collins is a renowned financial expert, known for his book, The Simple Path to Wealth. He's teaching millions a straightforward and realistic avenue for achieving wealth so that anyone can have financial security. What is the simple path?

0:45 Wow. So first of all, avoid debt because you can never be financially independent if you're carrying around debt. Next, live on less than you earn. But the problem is the way our culture has taught us to think about money is solely in terms of what can you buy with it. But the more must haves you have in your life, the less likely you are to become wealthy. And then the final one, invest the surplus. So stocks are the single most effective strongest wealth building tool that's ever been created. But the biggest pushback I get is from people who say, Well that's great. I mean if you've got a big income, a hundred, two hundred, three hundred thousand dollars a year, then yeah, the simple path to wealth will work for you. That's not the truth. For instance, a friend of mine, he was making a million dollars a year. And he was broke because people have large incomes are much more likely to be drawn into the competing with the Joneses, whereas The people who make less money probably don't have those same social pressures and are more readily able to do it. So let's talk about investing then. Where do you think we should be investing our money at this moment of time? Should I buy Bitcoin? Do I need a financial advisor? So my advice and this is a little different than the more common advice out there would be

1:51 Just give me thirty seconds of your time. Two things I wanted to say. The first thing is a huge thank you for listening and tuning into the show week after week. It means the world to all of us, and this really is a dream that we absolutely never had and couldn't have imagined getting to this place. But secondly, it's a dream where we feel like we're only just getting started. And if you enjoy what we do here. Please join the twenty four percent of people that listen to this podcast regularly and follow us on this app.

2:17 Here's a promise I'm gonna make to you. I'm gonna do everything in my power to make this show as good as I can now and into the future. We're gonna deliver the guest that you want me to speak to, and we're gonna continue to keep doing all of the things you love about this show. Thank you. J. L. Collins.

2:42 You wrote a book, a very iconic book that's all millions of copies called The Simple Path to Wealth. Why did you write this book? I actually that book was an outgrowth of my blog. I started the blog.

2:56 To archive information I want on my daughter. to have available because if you get money right your life is so much better. You have so many more options. And the world offers so much to people who have the resources with which to access it. And so little.

3:16 For those people who don't have the resources. to access those things. And and if you don't have it It life is just so much harder. than it than it needs to be. When you think about the average person listening right now, what what is

3:30 What are some of the fundamental sort of misconceptions or misunderstandings or what would you call it, black spots that they have as it relates to money? The things they walk around assuming about money that are Incorrect. But you were maybe trying to get out of your daughter's mind. Right. So there's a chapter in the book called How to Think About Money.

3:50 And The fundamental way I think the vast majority of people think about money because this is what our culture has taught us the way our culture has taught us to think about money, is Solely in terms of what can you buy with it. So if you go to the average person, the lottery, for instance, is like a billion dollars at the moment. So people are buying lottery tickets.

4:13 And if you interviewed people standing in line to buy lottery tickets and said, Okay, if you win this million dollars, what are you gonna do with it? Well what you're typically gonna hear is well I'm gonna pay off my debts and I'm gonna pay off my m mortgage and I'm gonna buy my parents a house and I'm gonna buy myself a Lamborghini, I'm gonna buy, I'm gonna buy, I'm gonna buy. That's the way most people think about money. And that's certainly One of the things that money's very good at. It is a means of exchange.

4:40 But the other thing your money can do for you is work for you. Your money can make you more money. So you can exchange your time and effort and labor To earn money. And that's what most of us do.

4:54 But you can also Divert some of the money you earn into investments into what I call buying your freedom. And now your money is working for you. So instead of just thinking about what your money can buy, you can start thinking about what can your money earn? You can buy your freedom. You can buy your freedom, your financial freedom. Why is that an important

5:16 reframing. Of The role of money, in your view. What does that do if I start thinking about it through that lens? Well because as long as you are dependent on exchanging your effort, time and labor.

5:28 For money. You are beholden to whoever is willing to To pay you to do that. That's a limit of freedom. It's a it's a form of without being too dramatic, a form of slavery.

5:43 If you are always living paycheck to paycheck to pay the mortgage or the rent or whatever If on the other hand work is optional. You're a good example. And you've been a very successful guy. You're not doing this podcast because you need the money.

5:58 If You were still stuck. At a job that paid you a wage you wouldn't have the option to do this. Because you'd have to devote all your time to that job. So you could

6:10 pay the mortgage so you could pay the rent, so you could put food on the table. Money buys freedom. How does one get out of that situation? You know, if I I used to work in call centres Um answering phones and selling people things.

6:23 How how does one, in your view, realistically get from that place where you are kind of beholden to the paycheck and I was I'd spend my wage within the first week or so of the month and then I'd just suffer for the next three weeks. In the UK we have like a four week paying cycle. I think in the US it's two weeks typically, but I I took a I think a reckless road out of that life. The thing that gave me the proclivity to take the risk is like some kind of insecurity and trauma. Well like I couldn't I didn't have a plan B because I wanted to be

6:51 I wanted to like validate myself or something. And so I wonder if the the skill or the thing that I was given that I'm most thankful for is like Some kind of Chip on my shoulder. Some kind of trauma. Yeah. But but on it genuinely,'cause I think like what would make you take a risk.

7:06 Like some of the risks that I took to leave university to then like Be be broken. I was like, Well I just I was driven I was dragged. By some kind of trauma. Right.

7:15 One of the things that I've observed and I think to the extent that I've had some success in my life, this is true. Yeah. Successful people do tend to have trauma in their background, at least That's my observation. Now I'm sure there are exceptions to that, but

7:32 But it does seem that People like us are striving to overcome those past traumas to have that ship on the shoulder to Yeah.

7:44 I've also met people Who Are very content. To be completely lacking in ambition. And

7:53 To have enough. To have a comfortable life and kinda do what they want to do, to have financial independence maybe. But they don't have this drive to be successful to to make a mark on on the world. And

8:09 they tend to have had better childhoods. And and uh and I think that there is That wasn't me, that doesn't appear to be you, but I think there's a lot To be said. For Or that.

8:21 Right. You y I mean you opened the book about Talking about a parable. Of the monk. And the minister. And the minister. Yeah.

8:28 Can you uh tell me about that parable'cause it seems to somewhat relate to what we're seeing here. I think very very much so. And that's the reason I opened the book with it. So the parable is There are these Uh two boys who grew up together, they're childhood friends. As frequently happens, they go their different directions in life as they become adults.

8:47 And one becomes a very successful, powerful minister to the king, and the other becomes a humble monk in tattered robes with a begging bowl and what have you, and years later they run into each other on the road. And they're getting reacquainted. And as they are, the minister the king takes pity on his poverty stricken friend in his tattered robes. And he says, You know. If you could learn to cater to the king.

9:13 You wouldn't have to live on rice and beans. To which the monk replies. You could learn to live on rice and beans. You wouldn't have to cater the king. And

9:25 For me, I've always been a little bit More towards the monk side. I'm uh I'm not a very materialistic person and I'm Comfortable and able to get along on very little.

9:38 And I think there's something beautiful about needing less. I have from my interviews met people who are very wealthy, even actually off camera. Who are very, very wealthy and appear to be happy. But I think I w I think it's safe to say That the richest people I know are amongst

9:57 the least happy people I know. So if I think about the very top the the billionaires that I know off camera, they are amongst the least happy Typically. Mm-hmm. Um Because I think whatever's taken them there

10:10 You're still haunting them while they're there. So it could be the chip on the shoulder, the insecurity, whatever happened to them that made them so driven and obsessed with validation and climbing is still haunting them now. But I do also I do know people like I say that are very, very rich and that Live. r remarkably content. I was I think part of it is their relationship with the staff.

10:29 Like And they probably keep it at arm's length, right? psychic distance from the stuff. Yeah, and I Just speaking from my own journey, at a very young age, but up until the age of twenty five, I was convinced that buying a Range Rover sport was gonna like

10:43 really make me really happy. And um The anti climax once I I got those things was was like stu it was staggering. It was a complete mental it was like someone had shaken my head. My reality distorted for a second because I thought this was meant to be it. And now I can still get things that I like.

11:00 But um I was saying to Will the other day that when I walked into my new house in LA Um I had pre prep myself to know that it was gonna have zero impact on my happiness. And that meant that I actually enjoyed it. Weirdly. Right. Like I was actually super grateful because I'd pre prepped myself to have a healthier relationship with the thing. Exactly. So there are a couple of things at play there, I think. One is it's the journey that's really satisfying.

11:23 Mm-hmm. The destination tends to be less so. And I think that's one of the problems with being m very materialistic because You know, if your definition of happiness is if I only owned this watch. Right. If I only had this watchmaker make me this intricate watch, then I would be happy. Well, I mean

11:44 Maybe, but Probably not. You're probably gonna have that watch, you're gonna look at it and say, W That's really nice. Wow, that's good. And uh and then uh well what's next? But if you enjoy the journey, Or and I think you made a very wise decision if you reset your expectations

12:01 And say, you know, I'm gonna have this nice house or this nice watch But I don't expect it to make me happy. But it's gonna be a nice thing to have in in my life. Somebody once said much wiser than me, you know, money doesn't change who you are. It it can magnify who you are.

12:18 So if you're an unhappy person and you have lots of money, you will probably still be an unhappy person. Uh if you're a happy person. I mean one of the happy in fact the single happiest guy I know, his life was the biggest financial disaster of anybody I personally know. And this guy's he's the literally the happiest human being I've ever met. Because he was happy before. Because he was happy before and there's other things besides money that makes you happy. Money And the reason that I I it was so important to me that

12:49 Teach my daughter this money gives you options. Right? Money allows you a lot. wider range of choices in life. But it doesn't necessarily make you happy. Right. If it allows you to pursue an option,

13:06 Yeah. otherwise you couldn't pursue and that option makes you happy, that's a different thing. I think if I was listening to this and I was Broke, like I used to be very broke. I

13:16 Would still A few wealth. at all costs. Because I know I had this phrase the other day which was It is Easier to get rich.

13:26 than it is to give up the idea that getting rich will make you happy. And I to myself. And if you had become rich, you would always think A hundred percent. You'd always wonder if that was and you know what so much of the unhappiness or anxiety that I had when I was Yeah, Miley Yeah, early innings of my life, my career.

13:46 came from looking down and seeing the bailiff letters or came from the credit card debt, or how am I gonna eat today, or, you know, can't go out and see my friends. So much of my mind was occupied by My inability to have freedom. Right. My lack of freedom. My need to get up at eight o'clock and walk for an hour and a half to a call center. With You know, so what I managed to remove was that.

14:07 I wouldn't say I I I added happiness, but I removed the unhappiness. Well and that's a c that's a key point. You know, money doesn't necessarily make you happy, but the lack of money. Oh yeah. terrible challenge, especially in the modern culture we've created. Okay, so if you have kids listening right now. Please.

14:25 Cover there is because I'm gonna say a swear word. Parents always message me and ask me to stop swearing so a lot of people are obsessed with this idea of fuck you, money. Let me just give you a definition. F you money refers to a financial situation where a person has enough money to live comfortably without needing to work and it gives you the freedom to say F you to anyone or anything. you don't want to tolerate such as a job, a boss, or a situation that doesn't align with your values. What does that mean to you? Yeah, so for me, so that's a good definition, but

14:55 I would substitute in that definition financial independence. F you money for me is the money you accumulate on the way. Right. So for instance if you're a bodybuilder. You know, financial independence is when you're on the stage and You're winning, you're at the elite level.

15:14 But along the way, from the moment you start working out, you get a little bit stronger, a little bit stronger, a little bit stronger, right? Same thing financially. the moment you start setting aside money and investing it, you become a little bit financially stronger. And that builds over time. That in my mind is the FU money. Because Long before you're financially independent.

15:36 That money. gives you enormous freedom. You might not be able to never work again. But if you need to, you could leave a toxic job. Knowing you could survive for months or even years

15:51 Well, you looked for the better job because you have that FU money. So it allows you to say F U in that case to an employer. And if your daughter daughter turned around, what's her name? Jessica. Jessica. If Jessica turns around to you and says, Dad What

16:06 What is something I should not do with my money if I Um want to be wealthy. What is what are like the big what is the first thing that comes to mind to as a no no? If I want to be financially wealthy. the mo more common advice that I think you should avoid if your goal is to become financially independent at a young age

16:27 You probably don't want to go buy a house. But it's a very controversial thing to say. The reason you want buy a house is because Houses dramatically inflation inflate by and large your cost of living. Yeah, you're You're putting your capital into that house and now it's not gonna be earning things, it's gonna be sitting idly

16:47 Along with owning a house you have the expenses of maintaining it, paying the taxes on it, blah blah blah. If you stay in a apartment that is just enough to meet your needs, which by the way is what my daughter has done and continues to do. Your costs will be lower.

17:05 Explain that to me. Explain why my cost of living goes up if I buy a house. Sure. So people it doesn't have to, but people people typically buy the most house they can possibly afford. The industry drives them that way. If you go to a real estate agent, you say, I think I'm gonna I want to buy a house, right? First question they're gonna ask is How much do you make? What she wants been, you know. And and then you go to the bank And you say, Okay, I I wanna buy a house, how much will you lend me? And they'll say, Well how much should you make? And then they'll come back with the large number

17:35 of how much they're willing to lend you. If you follow those guidelines, you're gonna wind up with a house that's gonna be a burden. You are not buying it from a position of strength, you are stretching to buy it, you are borrowing the most money a bank's willing to give you. You probably don't want to do that. mean you can, that's the bank wants you to do that'cause that's how they make the most money. But that's not the best thing for you to do. But that's what you get drawn into. And then when you buy that house I don't know that I've ever known anybody, including me, by the way, and I've owned houses most of my adult life, who's owned a house without doing renovations on it.

18:10 So you've got those costs. You're gonna furnish that house'cause you're probably buying more square footage than you were renting before. You gonna need new furniture, or maybe you just want better furniture for your new house. Maybe new appliances, landscaping, taxes, maintenance. mean the the list is endless and people Say, Well, you know, I can buy this house.

18:30 My mortgage. It's the same as my rent. Well yeah, but your mortgage is just the starting point. You've got all these other expenses with the house and the other thing is they are variable expenses. Variable expenses. Yeah, with your rent. You know, if if you're renting an apartment.

18:48 You're paying twenty five hundred dollars a month for your apartment, right? You know exactly what your housing costs are for the term of your least. Five hundred dollars a month. If you own a house, maybe your mortgage is twenty five hundred dollars a month. And then you need new roof.

19:03 No, that's twenty grand. You need a new septic system, which by the way, I'm looking at having to put it in my cottage. You know, well that's another twenty five grand, right? And you don't necessarily know when those things are gonna come at you. It is a bit of a trap, isn't it? It's a trap that um

19:20 I didn't realise this until I bought a house and most people don't. Like I even sit here on this podcast doing this for for a living and then I I made this stupid mistake of buying a house. And I do think it was a stupid mistake because I Uh, we'll talk about opportunity costs in a second, but it was in hindsight, it was like a terrible decision. I spent all this money on this house. It was a house abroad. It was also like a holiday home, I guess.

19:43 And every time I come. All I see is things that I need to change. Looking in the United States, for instance if Twenty years ago, thirty years ago, you bought a house in San Francisco. We have done very, very well financially.

19:57 If you bought a house in Detroit Not so much. So then the question becomes And people will say, Well, obviously you don't buy a house in Detroit, you buy a house in San Francisco. Well, I'm not an expert in real estate, but

20:10 I am reading more and more commonly that San Francisco is has a lot of Very challenging problems at the moment. Detroit, on the other hand, where I was just visiting uh a couple of years ago is enjoying a renaissance. Detroit's Coming back.

20:26 So who's to say in twenty, thirty years people won't be saying You bought in Detroit. Back in twenty twenty five. You were golden and if you're about San Francisco, yeah, not so much. Sometimes real estate.

20:39 Buying a house can work out. In a spectacular fashion. And that's The stories people tend to hear. But not always. And that's what I tend to see in the comment section when we talk about this issue of buying a house. I was just looking at the comment section actually and

20:53 On a previous conversation where we talked about Whether you should buy a house. Someone said I bought a house and it's the best thing I ever did. Right. It's launched my mindset in new directions. Remember But having your own space has profound psychological impacts and can be life changing for some That don't live in

21:10 A healthy environment. The psychological impact of buying a house. What that commented said is is Obviously it's absolutely true.

21:22 I am not anti house. As I mentioned a moment ago, I've owned houses most of my adult life. But I've never bought them because I thought they were an investment, I bought them because I thought they would enhance my life in a way I wanted it enhanced. They would make my life better. They are, in my view, an expensive indulgence. I have nothing against expensive indulgences. That's one of the reasons we accumulate money. Right? I like some expensive and some I don't care about, some I like.

21:53 Um, but that's what they are. And if you can easily afford it Then by all means. By the house. Looking at some stats here, it says home buying was once a solid investment due to rising property values and lower mortgage rates. However, for younger generations, this is no longer the case. Because of skyrocketing home prices. Since nineteen eighty, US home prices have increased by over three hundred percent.

22:15 outpacing inflation and wage growth. In twenty twenty-three, mortgage rates surged past seven percent, making monthly payments significantly higher than before, and medium wages have only risen by about fifteen percent. Year the year two thousand, while home prices have more than doubled, making homeownership less affordable. And lastly, the cost of renting is often cheaper than buying, especially in cities where prices have outpaced wage growth, leading many younger people to choose renting for flexibility. This point of flexibility as well is what we don't talk about.

22:46 Right. Which is the ability to go do something else in another country. And my brother said this to me when I was twenty. My brother's very smart he's a year older than me. Financial genius and has a And I remember when I was twenty Maybe twenty four. And I was talking about Do I buy a house?

23:03 And he Both told me it was the worst. investment I could ever make. But he also told me to think about flexibility and my ability to get up and move. Yes. And I was what do you mean? And he said, Well, listen You're in a certain era of your career.

23:15 Well You might be. c called by someone in San Francisco who offers you a great opportunity and you might want to go next week. And actually when I look at how my career transpired, that's exactly what happened. I was in Plymouth. And then I went to Manchester.

23:32 For business, then I went to London for business. Then I went around the world to San Francisco to New York for business. And I'm I'm moving with the opportunity. And if I was anchored somewhere because a a mortgage does drag that along. Yeah. And and a mortgage does like psychologically anchor you. This is what people don't talk about. It creates a huge amount of guilt. If you then

23:52 Wanna get up and go because you y in your head you're going, Well I'm gonna be paying Double. Well the I agree with everything you said. I agree I I agree with your brother. Flexibility, especially when you're young and your career is in a dynamic

24:07 Uh phase. It is not to be underrated. For my daughter, I mean, she loves living in Savannah. They've been there for three years. But She has an adventurersome soul, and Yeah, she says, I don't know, I mean maybe at some point I'll wanna go live in Europe or somewhere else.

24:26 Well if you have a house that complicates that decision. And even if you are fortunate enough to buy In a market where your values are rising. The cost Associated with buying and selling a houses are enormous.

24:42 the you know, the real estate commission and the taxes and what have you. So getting in and out of a house is an expensive proposition. Getting in and out of an apartment doesn't cost anything. I mean maybe your security deposit, right? But That's it. That's that's very clean and simple, but

24:59 If you're if you were to buy a house in Savannah and then to say, you know, I think I wanna go live in in Portugal. Well, now you gotta sell that house, or maybe you have to rent it and now you're a landlord. You're an accidental rent landlord, which was subject to my second point. You know, that's not optimal. I mean if you set out to be a landlord, great. But if you become an accidental landlord because you

25:24 can't sell your house that you don't want to live in anymore, that's not so great. So Flexibility is is enormously important. If I if I were to ask you what is The simple path. Wow.

25:37 And you had to respond in a sentence. What would that sentence be? Avoid debt, live on less than you earn, invest a surplus. So let's talk about debt then. Okay. Why did you say avoid debt?

25:50 You can never be financially independent if you're carrying around debt. It's a ball and chain that you drag drag along, especially consumer debt. Now to be clear If you're in business and your business is Is carrying debt as a is a function of Oh

26:08 running the operation for one reason or another, that's kind of a different thing. But in terms of personal debt? Uh, if you're running up credit card debt, if you're leasing expensive cars or or borrowing money to buy expensive cars or what have you, possibly a mortgage is in a slightly different category, but it has all the disadvantages we just talked about.

26:31 Yeah, debt's a ball and chain. It's it's like asking a swimmer to compete and and strapping a weight around their waist. Uh it just is it possible? Sure, I guess it is, but it's a whole lot a lot more difficult. So job one, if you have dead, is to blow it out. And

26:49 I mean blowing it out is a dream for many, but it's uh Easier said than done, I guess. It simply means that You have to organize your life in such a fashion The

27:00 you can divert some money to either buying your freedom investments Or if you have debt. Paying off that debt. You just you have to do that. And people say, Well I can't do that, you know, I I need to have this in the mo you know, I I need to have the these the two least luxury cars and we need to live in this neighborhood, and we need to send the kids to these schools, and we need to and I call that the tyranny of the must haves.

27:26 The more must haves you have in your life, the less likely you are to become financially independent. Now that sh Your choice. That's an individual's choice. It may very well be that those things Are more important to you than buying your freedom. And it's your money. It's not for me to tell anybody w how they should spend their money or what's important to me or what's important to them.

27:50 For me. There was nothing I could spend my money on that was more important than my freedom, which is why from the beginning I diverted half of my income. To buying that thing. Was never deprivation.

28:03 Most people say, Oh, that's this is a path of deprivation. I can't spend my money. Well not for me. I you know, I spent every dime that ever came my way. It's just that I spent Half of those dimes on the thing that I want it

28:18 Which was my freedom. And you own that. By owning assets. So it wasn't I wasn't depriving myself any more than If somebody said

28:30 You know I'm looking at buy uh A Mercedes or a Volkswagen, right? If I'm by the Mercedes, I'm in this big fancy car and people will be impressed. If I buy the Volkswagen, yeah, I'm in this more modest car, but then I've got a whole bunch of money left over that I can spend on a wardrobe or going out to dinner or a more expensive apartment. It's just a matter of choosing where you spend your money on.

28:54 Right. So One of the choices that I I do I am under no illusion that Most people who read my book Will actually follow the simple path.

29:06 Because I I think there's just way too much cultural influence to spend your money elsewhere. But at least the people who read the book and listen to this interview. We'll be aware. That there is something else they could buy with their money.

29:21 And that's Their personal freedom. And you do that by assets. And there was nothing more important to me. Nothing I wanted more. So it was not deprivation.

29:31 At all. I am I reflect back on where I used to be in my life and if I'd heard this conversation then I really, really struggled with um saving money because saving Spending money was so closely linked to my sense of s self and my self esteem.

29:49 A lot of people feel that way. I I've s shared this story before, but when I I was working in those call centres at uh which one? Swinton Swinton's car insurance where I used to work. I would get my paycheck and it might be I don't know it. one thousand five hundred pounds or two thousand pounds, whatever. And like on my way home on payday, I'd go buy a sixty inch T V. And I'd put it in the house. And then I'd try and see if I had enough money to buy a PlayStation. And then about a week later

30:14 When I realized that I was broke, I would sell both. And I look at that behavior as such absolute like It's objectively like crazy behavior. Like repeated. But it shows the extent to which I got a dopamine hit from having a nice thing and I was trapped in that cycle of like

30:31 Buy the nice thing, dopamine hit, feel validated, feel like I'm a successful person, and then have to sell it a week later. Yeah. So I really have a huge amount of empathy for people that are stuck in this. Spending for self esteem cycle. And they hear these you know, they hear people like me and you talk about these things now.

30:50 And it feels easier said than done. That to me seems kind of insane and and Yeah, one of the things that somebody pointed out One time is

31:01 If you're Driving around in a Ferrari. Yeah, maybe you're thinking to yourself, if you're bought the Ferrari because you want to impress people. Everybody's looking at me and they're thinking, Wow, what a cool guy that is driving driving that Ferrari.

31:15 No, that's not what they're thinking. They're looking at you and that Ferrari and what they're thinking is, Wow, I would look cool if I was driving that Ferrari. They're not thinking about you at all. It doesn't it you're making no impact on on what their opinion of you is. So on this point of debt, I I did have some people contact me that were childhood friends of mine recently and asked Um ask me for advice on getting out of debt.

31:39 Mm. And one particular friend said that he had forty thousand Dollars worth of debt. and asked me for advice on it. And I I really I'm not an expert in this, so I kinda hesitated to give any advice. But the advice I'm hearing from you is essentially you have to make a concession. You have to

31:55 pull back your spending and get things back under control. You have to I don't know, sell your house. So here's some good news. So you're carry to your friend, he's carried forty thousand dollars in debt, right? My advice.

32:07 would be. And this is a little different than the more common advice out there, but I will look at all my debts. And I would pick the one that was charging me the highest interest rate. And I would f I'd pay the minimums on all the others and I would focus on paying that one down as fast as I could because that's the biggest return on my investment. And when that one was gone I'd go to the second until I work my way through.

32:30 It's gonna be hard. And the more quickly you do it, the harder it's gonna be'cause you're gonna have to make more dramatic adjustments to your life. That's bad news. Here's the good news is once you are out of debt, if you do this You've developed a wonderful discipline of living on less than you earn.

32:49 And diverting the excess to something else that you want more, in this case. Something else you want more is g being out of debt. If you continue with that discipline, you now have the cash flow to begin building those assets and becoming wealthy. You've already developed that lifestyle and that discipline. So that's the one ray of sunshine, if you will, in in

33:11 the process of getting out of debt. Okay, to play devil's advocate with me then on this one. Sure. So when I was eighty, nineteen years old, my strategy I was well aware that I'd fucked up my financial situation. Like I was it was painly clear that I'd figured out what a credit score was and I realized that I'd destroyed mine. I also had these letters that these failing letters and and I had I had mounting issues. I was avoiding Finances, bills, envelopes, you name it, I just thought If I don't look at it, it doesn't exist.

33:41 Which I know a lot of people do. Because I when I was writing a a previous book that I wrote, I looked into some of the stats about humans' ability to avoid. Whether it's health situations. If a friend of yours gets a bad diagnosis, that I was reading a study that said some people are more likely to not go get checked. Even if their friends had it because they just want to avoid it. Right. Um, and then with national finances, I was reading a study that said we're incurring billions and billions and billions and billions of d of debt as a society just because we don't look at our bank balance, we don't open open envelopes. So I know I'm not the only one. No, not at all. My strategy.

34:14 What. My st my this is such a dumb strategy. Honestly, I'm and I d this sounds like crazy talk, but it's just the truth in my head. My strategy was I'm gonna get so rich that I outpace this debt. And then I'll deal with it later. Right. My strategy was if I can just get really rich Which is kind of the inverse of what you

34:34 Right. This That won't be a problem. At eighteen or nineteen years old. You don't know the world.

34:42 You are guessing. Right. And I was guessing. That I can earn my way out of it. The probability Says I was wrong.

34:49 The probability says that I was like delusional or some or just like I Watch too many rap videos or something. Right. Um so e objectively That is a reckless choice. Even if even if it's true.

35:01 And it ends up being true for you, you end up being what it's still a bad choice because probability is stacked against you. Well, that's true. And but y you just made a critical point in that You can make a bad choice where things work out well for you. Yeah, exactly. So a great example of that is investing in Bitcoin. Right.

35:22 I'm not I'm not a proponent of investing in Bitcoin. Certainly. For those people who bought Bitcoin ten, fifteen years ago, they've done extraordinarily well. They got lucky. Lots of speculations don't work out that well. So if you are speculating

35:40 Then you it might work out extraordinarily well for you. But it's You're taking some pretty heavy risks in doing that. Right. Same thing with a lottery ticket. I mean, the chances of winning the lottery are infinitesimally small, but people buy lots and lots of lottery tickets.

35:57 Somebody somebody does win it. But that's Probably not a good way to spend your money. Bitcoin. Mm-hmm. You're not a fan of Bitcoin.

36:06 No. And I'm not I'm not opposed to Bitcoin existing in the world? Uh, but for me it's a speculation, and I'm not a speculator. When you say spec, give me some colour,'cause I'm sure there's some people who I mean if you want to speculate that Bitcoin so I I would recommend against it. So and people and they might push back and say, well but J L

36:33 You know, you were recommending against uh against it ten years ago, which I was, and you and you've been wrong. I mean absolutely wrong. It's been great ten years. It's Well, it's done far better than the S P five hundred. Yeah. That's true. If you'd had a crystal ball, if I'd known

36:51 That ten years ago, yeah, well I would have been in Bitcoin, right? So the question isn't. How is Bitcoin done? In the last ten years. It's how how is it gonna do in the next ten years? I don't know the answer to that.

37:05 But That's the question. Is it worth a hundred thousand dollars a coin now? Is it gonna continue to grow at that pace? But You regret that you missed over the last ten years.

37:17 That's the question you have to ask yourself. But I could say It's successful. Is evidence that it's serving some kind of utility for some people somewhere.

37:29 It's success means that there is demand for it by very nature that the price has increased so cr crazily over the last fifteen years. Yeah, that and that's an argument that people make and there's a lot of debate around that. Right. His You know, what is the function that it has or that it's going to develop?

37:49 And you might well be right. I don't I don't know the answer to that question. It's Not currently at least a currency because it's way too volatile to serve as a currency unless you're doing illegal things that make it more attractive than the volatility makes it unattractive. So that's not necessarily good for society, but But so it can't function as a currency.

38:12 So Right now it's just a speculation. Is it gonna grow into something that's more functional? Well Yeah, listening to one of the other interviews you you you did, uh uh That woman.

38:26 absolutely believes that that's what's happening. And then Kathy Woods, so that's why she's in Bitcoin. And she may be right. But She's speculating.

38:36 And Again, I have nothing against speculating as long as you understand, as I'm sure she does, that that's what you're doing. You'd prefer investing. I prefer Have an engine creating wealth behind where I put my money.

38:49 I had um a text message from a really good friend of mine who uh my audience will know because they've been on the show before as a guest and uh they're very well known in the UK. Um, they text me and said, Please can I ask you a question? If you had mortgages And you had A lump sum of money.

39:05 Thinking about the future of AI, potential market crashes. Would you pay off chunks? Or would you invest? My feeling is that stocks aren't really safe. Am I being paranoid?

39:17 Well there that's there are a couple of questions embedded in that. So the first question is When I pay off a mortgage and the second question is are Stocks. Save. Right. So the mortgage one first to me is is

39:31 Pretty easy. It kinda depends on your interest rate. What is an interest rate? So an interest rate is what you pay to borrow money. So when you when you get a mortgage, you're borrowing money. Right. You're borrowing it from a bank or a financial institution. And they they want to be paid for letting you use their money and

39:51 Three, three and a half percent or less. That's really cheap money. I would hold on to that. I I would be in no hurry to pay that off. On the other side. If you have a mortgage rate that's say six percent or higher

40:07 Well, when you pay off that mortgage essentially you're locking in a guaranteed Return of that Interest rate, right? So if you pay off an eight percent mortgage You've locked in an eight percent return on that money effectively. And then to finish the thought is if your interest rate's between those those two.

40:26 Thanks Three and a half percent, uh five and a half, six percent. And I would say it would depend would you pay it off or not is What makes you emotionally more comfortable. And there's value in being emotionally comfortable. So if you are comfortable carrying the debt

40:40 You might say, Well I think I can do better in the stock market, so I'm gonna carry it. If emotionally like me you just wouldn't Rather not have any dead at all than you than you blow it off. Maybe we could use the coins as a Example of what an interest rate is. Sure.

40:55 Let's say I'm sitting on this pile of gold. And you want to borrow some of my gold. I'm happy. To loan you, Steven, these ten very valuable old pieces. But I don't like you well enough to just let you borrow them for free.

41:11 I wanna be paid. I wanna get a reward back for that. So when you return these gold pieces to me in a year You're gonna return eleven gold pieces to me. You're gonna pay me ten percent. Because An extra gold piece. Is ten percent of these ten, right? Make sense? Yeah. That's what interest is. So I if I say, Okay, well I'm gonna buy a house. Right, you're gonna take you're gonna take those ten gold pieces, go ahead and take them. So I I'm buying a house that costs ten gold pieces. Right, right.

41:38 So I'm gonna accept your ten percent interest rate. Okay. Am I paying Ten percent. A year?

41:46 On the total. On the balance. So the way a mortgage works is in the let's say it's a thirty year mortgage. You're gonna be sp giving me a certain amount of money every month. Right, that's your mortgage payment. And in the beginning most of that payment is going to be interest to me. And a very tiny sliver of it will be pay down the principal part of the ten gold pieces that you bought.

42:11 Or that you yeah, that you borrowed. A very tiny sliver. And then over the course of thirty years that ratio Changes as you pay down the debt. And less and less of it. is interest payments.

42:23 And more and more of it is paying down. the principal until at the end of thirty years you paid all the principal and you paid me a fairly enormous amount of money in debt over that or in uh interest over that thirty years. And how do I get a good interest rate? How do I get a very, very low interest rate? And what is a low interest rate? On a mortgage. Yeah. So So first of all you're gonna pay basically whatever the

42:47 So the Fed sets an overall interest rate. You've heard the Fed will raise or lower interest rates. And that will influence what lenders like bank and mortgage companies will charge. It doesn't require them to do a certain level, but it will influence up or down

43:08 how much they're gonna expect in return. For their money. Partially because the the Fed is a Anticipating inflation. By how they set interest rates. So if I'm lending you money. And I'm worried about inflation if I lend you my ten gold pieces and say I want eleven back in a year, ten percent

43:32 But inflation is fifteen percent. Well, I've just made a very, very bad deal. So if I think inflation is gonna be fifteen percent, I'm gonna want You know, so I so I'm I'm making up.

43:45 Profit above and beyond inflation. So going back to your question that how do you get a good mortgage rate, well you shop around to various lenders at the time you want the mortgage and see, you know, who's offering what, and there'll be some variation within a eighth of a percent or a quarter of a percent or something. But for the most part. they're all gonna be very tightly put together because they're looking at the overall projection of what inflation's gonna be, what uh they can charge, what the cost of money is, what they can charge in interest, and then competitively what they What they have to do to get your business.

44:20 So There's not gonna be a lot of variation. You're not gonna get a a significantly better interest rate than somebody else, but if you shop around you can probably do a little bit better. And interest rates have been fluctuating quite a lot over the last twenty odd years. In the early two thousands, interest rates in the US were relatively high, peaking at almost seven percent. In two thousand and six, due to efforts to curb inflation.

44:43 And then after the financial crisis, um They dropped a little bit. Um And I was looking here, post two thousand and eight, central banks around the world adopted ultra low interest rates to revive economies. US rates were slashed to near zero percent. By two thousand eight, and remained there for nearly a decade.

45:02 Right. Damn. Um Covid nineteen pandemic. uh interest rates led to another record in cuts globally, with the US Fed lowering interest rates to zero percent

45:13 So does this mean I should really be waiting for a time when the interest rates are really, really low if I want to buy a house. Well, not necessarily because you never know when that's gonna happen. I mean Some some people have said predicting what the stock market is gonna do is very, very difficult. Predicting where interest rates are gonna go, even more so.

45:36 So I think if you're gonna if you're gonna buy a house, then again, you buy it based on whether you can easily afford it, whether it meets your needs at a given time, and you deal with the interest rates you have to deal with. And of course, that'll be part of the equation in terms of how much you can afford. 'Cause the interest rate on your mortgage is gonna have a lot to do with how much you have to pay every month. And it's quite high at the moment interest rates. High compared to what? So the fur you know, right now mortgage rates are six percent, seven percent somewhere there.

46:06 The first mortgage I took out was eighteen percent. Eighteen percent. That would have been in Nineteen seventy nine?'Cause in the nineteen seventies we had really high inflation. And when you have high inflation, you have high interest rates. Right. So to me I hear a six percent mortgage rate and it's

46:25 Doesn't sound bad to me. But for people who grew up Where Mortgage rates were Two and a half, three percent. Yeah, I mean it's huge.

46:35 But depends on your perspective. And the other half of the lady's question who sent me that text message was around is investing in stock safe right now. And she did sort of preface it by saying the questions in the context of AI, all of this disruption that's going on in the world. People are gonna lose their jobs, et cetera, et cetera.

46:53 Is it safe to invest in stocks right now? So depends on your time horizon. So stocks are are the Most effective, strongest wealth building tool that's ever been created.

47:09 But they are also very, very volatile. So when she says our stock's safe to invest in right now. What I hear is very short term thinking. And stocks are never safe to invest in for the short term. Because they're volatile.

47:26 they can take a deep plunge and that's a perfectly natural part of the process. People get all cra especially if you watch the news, they people go insane and panicked, but Crashes and pullbacks in the stock market are perfectly natural part of the process. They're very, very difficult, if not impossible, to predict when they're gonna happen. But that's the reason you never

47:50 want to invest in stocks for money that you're gonna need in the new near term. If you Zoom out. pro longer periods of time, which is I re was what I recommend Stocks are stunningly reliable.

48:05 I mean there are very few times over the course of ten years where stocks have not given you a good return. And you got twenty years and I I mean it's very rare. So If you look long term, stocks are extremely safe and extremely powerful in building in building wealth, but they are very volatile along the way. So you have to be willing And able. to endure that volatility. If you're gonna panic and sell when the market drops.

48:32 Not if. Because the market will drop. It's a perfectly natural part of the process. If you're gonna panic and sell when that happens, you do not want to invest in stocks. 'Cause they will leave you bleeding on the side of the road. Following my advice will leave you bleeding on the side of the road if you panic and sell.

48:51 It's a hundred percent. Dependent. On tying yourself to the mast during the storm, And ignoring the volatility. And continuing to invest into it because now

49:03 You're actually accumulating shares on sale because prices are down. Because The storm never lasts. It always Blows over.

49:14 And the sunshine comes back out and prosperity returns. You're talking here about the emotional side of investing. Which is critical. Yeah. If you if you can't control your emotions, you're you're gonna be selling at the wrong time and buying at the wrong time. So this is such a huge part of it that people don't talk about enough. They talk about tactics, strategies, what to invest in, et cetera. But they don't talk about the emotional side, which is really like I'm gonna keep it. even bigger element of this. Because if you think about even how the brain is set up and

49:43 It's fear. It's It's emotion. You're in greed.

49:49 And when the when the prices drop. You know, I mean we've all got a story, w so many people listening. I remember my first ever investment, I put ten thousand pounds into Facebook stock a long, long, long, long time ago. And then it went down and I sold. Yeah. I'm never investing again. And if I just

50:04 Left it. Yeah. Um, God, that would be worth so much money. It'd probably be worth six figures now. Right. But I I hadn't No one had ever taught me about the emotional side. And actually part of the reason I sold it was because I needed that money.

50:17 So there's two things w there. One is the emotional side of selling it. The other thing is investing money that is not for the long term.'Cause you turned out you should never invest in money in the stock market that is you're not willing to commit for decades. This is a long term horizon because That's what allows you to weather the storms. If you're saving for a house, for instance, well, you probably don't want to be in the stock market. The best investor I've ever met is my girlfriend. Uh because she she loses the password. To me the besting app and honestly every like two years I get they

50:49 Do you rem I it was like you bought of that index fund or Bitcoin or whatever it is. I was like Do you know the price of it? And she's like, No, I've forgot I've forgotten the password to the app. And we always like log back in once every two years and look in it and I'm like, Oh my god, babe, you're rich. And she's like, Oh, okay. And then she loses the password again, she forgets it. This is an incredibly important point you just touched on.

51:10 So Jack Bogle, the guy who created Retail. index funds that we can invest in now created with the Vanguard Group in nineteen seventy five. Bogle once said, You know Invest in the S P five hundred.

51:25 And don't even open your statements when they come. Just Let them stay. Don't even open'em For twenty years. And then open the final one.

51:33 And have a cardiologist standing by because you will be stunned. Yeah. the level of wealth that you've accumulated. One of the things that I wrote this this book for my daughter. Right.

51:46 My daughter is sounds like she's kinda like your girlfriend. She's very smart, but she has zero interest in this financial stuff. That is a superpower. Because Unlike me and maybe a lot of people listening to us who are interested in this stuff and who are watching the market all the time, She and your girlfriend are never gonna be tempted.

52:08 to panic when the market drops, because they're not going to notice the market dropped. Right? Because they're they don't they don't care. And the less you tinker with your investments Charlie Munger, who was Warren Buffett's partner, once said the worst thing you can do as an investor is Get in the way of compounding.

52:26 Right. dancing into the market trying to sell and buy back in and what have you. Just let the compounding run. I get so many people who read my work. And they say, Wow, J L, I I I I really get it and it's wonderful and you're absolutely right about everything. But

52:42 If we just did this one little thing differently. It would be even better. And they are I've come to think of them as the tinkerers. Right? Amen.

52:52 Yeah. I think a lot of them are men. I think I think women are a little less inclined to tinker because men put their masculinity on the line in doing these things. And that's not useful. I asked the question about men and women because I got some stats here from actually from Vanguard that says men are seventy percent more likely to invest in high risk assets like individual stocks. versus safer assets than women, men's portfolio are fifty percent more volatile, which leads to higher

53:22 potential returns, but also huge greater losses. As it relates to men again, despite having higher risk taking, men underperform women in long term returns annually. Due to over trading. Tinkering. And timing mistakes. Tinkering.

53:38 And men trade. Forty five percent more often than women, resulting in more fees because every time they make a trade they pay a fee. And lower Gains, that's according to Berkshire Hathaway. The summary here is that men take more risks.

53:51 But in the long term tend to earn less because of frequent mistakes and emotional trading, whereas women are more cautious And their approach tends to yield better returns. Do you know what we've learned here? Yeah. I have a very strong feminine side. Well gosh, yeah. Damn.

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55:07 Rubric lets you move fast without putting your business at risk. To learn more, head to rubric.com. You talked about compounding. You talked about how one should maybe not open the envelope that has their stable method. So the blue line that's that's running Fairly flat is the contributions to this hypothetical investment. And the red line is the value.

55:41 And what's striking and this is this is what's striking about compounding in general Is that the two track each other almost exactly for a surprisingly long time. And then they begin to diverge. And then the compounding makes the value of the investment skyrocket. It hockey sticks. And I didn't know you were gonna show this to me. But what's interesting

56:07 To me about this is I used to do the Chautauquas. They were events where we'd take a small group of people to some cool place in the world and hang out. And there were people who followed my work and and I would have one on one sessions with them and We talk about whatever they wanted, but mostly it was their finances. And very commonly. These people would lay out their their investments, their their finances and and

56:33 They would ask, Am I financially independent? And that's a v there's very simple mathematical formula about that. How much did you spend? I spend a hundred thousand dollars a year. Okay. If you take the four percent guideline, withdrawal.

56:47 So a guy named Bill Benkin came up that you could safely withdraw four percent of your portfolio and it would continue to survive over time. And it would so you could you could pull that out. Without

57:03 depleting the portfolio. There was a woman who came to one of our Chautauqua, she was a banker. So obviously knows her way around basic math. Right. She was

57:14 At the end of She Talk where she was gonna take a new job starting that Monday. Was gonna pay her a million dollars a year. We're going over her finances and she said, Yeah, I've I've got five million dollars invested. Okay. Am I financially independent? Well I can't answer that question until I know how much you're spending.

57:33 So I'm spending a hundred thousand dollars a year. Okay. Well Hundred thousand dollars a year. If you multiply it by twenty five, you get two and a half million dollars.

57:46 Four percent of two and a half million is A hundred thousand. Right. So that's how that math works. So if you need a hundred thousand to live on, you need two and a half million investment. Make sense? Yeah. Okay. So you can look at it either way. You can say I've got two and a half million

58:02 If I take four percent of that a year, that's a hundred thousand. Or I n I'm spending a hundred thousand, how much do I need? You multiply that by twenty five. Two and a half. So just a Make sure I'm clear.

58:15 If I Look at my investment portfolio. And I have a hundred dollars in there. If I can live are you saying that if I live on four Dollars.

58:24 Which is four percent of my investment portfolio, then I'm financially independent. Right. That's a good now, that's a good guideline. I mean There's lots of variations, but this is a guid guideline this financial advisor Bill Bengen came up with Um and then there's a thing called the Trinity study, which was done I want to say in the nineties that looked at a lot of these scenarios and basically verified that

58:46 This was a very good baseline. Um so four percent is I don't like the word rule because That implies that it's hard and fast, but it's a great guideline. If you want to have a have an idea of whether or not you're financially independent or not, this is a good guideline. So she's spending a hundred thousand dollars a year and she's got five million, she wants to know.

59:10 Am I financial independent? And I said, Times two. I mean you have twice as much money as you need given your level of spending. So the question that I always had going back to this little chart.

59:25 Is how and I would get this question a lot, Stephen. You know, they'd show me their numbers. And they would very clearly be financially independent on that based on that math we just discussed. And these were smart people who can easily do basic arithmetic.

59:41 How how is it that they're asking me this this question? And suddenly it dawned on me this is how. Because Compounding is a is a hockey stick. It goes along and and kinda doesn't appear to be happening and then it slowly starts to happen and all of a sudden it it's way up here.

1:00:01 It happens so quickly and so stunningly they can't quite believe it. It turned out it's not that they couldn't do the basic math. They certainly could do the basic math. What it was is they couldn't quite believe what the math was telling them. And they wanted me to it's like

1:00:21 You see what's on that wall over there? I mean A are you seeing what I'm seeing? Because I can't quite believe that I'm seeing that. I need you to confirm But yeah, you're saying the same thing I'm saying.

1:00:33 And in this example. All it is is someone has Yeah. They've started with zero. And they've paid in a small contribution every year to their investment. The investment is getting eleven percent return a year and suddenly the thing goes

1:00:49 I I think that was one of the most pivotal moments in my life where I went online Five, six years ago and looked at a compounding interest calculator. So it's stunning. It's it is stunning. It is absolutely stunning. And it shows that if you just leave your money In a place where it's getting

1:01:08 This kind of return. Over time. Everything seems to take care of itself. So Let me let me close the circle in a sense. On on that subject. Because

1:01:22 One of the things that I think gets overlooked With my book is this is the simple path. Too well. Which means if you follow it you will become Wealthy.

1:01:34 Right. So We go back to you know, buying those things that people maybe want to buy, whether it's the fancy car or the or the house. What

1:01:45 Once you become wealthy, you can not only buy those things, but you're buying them from a position of power. Right. You can easily afford them. You become financially independent, which means that your investments are throwing off more money than you're spending. My wife and I are basically uh pretty naturally frugal people. One of the ways I suppose that we got to where we are.

1:02:08 But That doesn't necessarily serve us the the the level of wealth we have now. And so We still have this tendency to say, Oh, we're thinking about getting this stuff, how much does it cost? And do we really want to spend that money and Depending on who it is, either she'll turn to me or I'll turn to her and say. Than matter is free.

1:02:27 Everything's free. And that's a very liberating way to look at things. So that's where the simple path ultimately will will get you. That's what I bought. All those years ago. One of the thoughts that I had, which I do think is somewhat logical was my brother and me are very different people. So he was very, very frugal and I was reckless. And

1:02:48 One of the ways that I self justified my recklessness was well, you know, you've got to enjoy life. And I'm only young once. So I'm only gonna get the opportunity to do some of these things that are Part of being young once, going to a nightclub and buying champagne and partying. You know. So I thought Yeah, I could save and save and save and save and I could get to, you know, seventy, eighty years old and have all this money. But what is the point if I haven't like enjoyed myself? I think it is a mistake to think

1:03:15 Then you need to spend money to be happy, to enjoy yourself. And the other thing I will say is that it's a lot more useful having money at this age than it would have been in my twenties because Money buys comfort among other things and comfort becomes much more important to you as you age.

1:03:35 They did a study where they Put people in a brain imaging scanner. And they ask them to think about themselves tomorrow. Then they asked them to think about themselves in a couple of years, then they asked them s to think about themselves in ten years' time, and they looked at the brain. And then they did another study. Where they got

1:03:51 The same people. To think about A celebrity. Mm-hmm. that they didn't know. I think it was Matt Damon or someone famous like that. And what the study proved was that we think about ourselves

1:04:03 In ten years' time. In the same way that we think about Matt Damon. The further away The time horizon. the more it becomes a total stranger. Right. And so I was writing I was writing recently for a chapter in my upcoming book about this idea that our future self is a stranger to the brain, thinking about me when I'm sixty.

1:04:22 Is like thinking about Matt Damon. I don't know if I can guy. So why do I care? Or do I care about protecting him? And I think this kind of speaks to what we were saying there is young people and even me as a young person kind of didn't really give a fuck about sixty year old me. Right.

1:04:37 Like I I it's so far away that I I don't really care about protecting his interests. I almost think that's a different person. He can figure that out. Mm-hmm And you know, you are h how old are you now? I'm seventy five.

1:04:50 The wisdom of hindsight. So you can tell me as a thirty three year old what it's like to be Both thirty three and seventy five. When I was thirty three, I didn't think about me at that older age at all. It never crossed my mind to do such a thing.

1:05:06 Right. So I was not For the benefit of seventy five year old JL. I was doing it for the benefit of twenty five year old JL. Thirty year old jail.

1:05:18 Right. Remember going back to a early part of our conversation. What up my definition of FU money? It's the money that you're accumulating. before that gets you ultimately to being financially independent, which is When you no longer need to trade your labor.

1:05:35 for money, right? Your money is doing all that. I wanted that. right now so when I was twenty five I'd save the princely sum of five thousand dollars, which Just as for inflation to be about twenty five, thirty thousand dollars today.

1:05:52 Uh and I want it to go back around Europe. Right, but that meant quitting my job, which I kinda liked. But The fact that I had that money Gave me.

1:06:05 The financial strength to go in and negotiate. That deal. If I was living paycheck to paycheck, I wouldn't have had that. I was far from being fully financially independent. So I wasn't doing this for seventy five year old JL. I was doing this right now for twenty five year old JL.

1:06:25 And it's just like when you work out, and clearly you do. Right. You don't go to the gym thinking at least I'm making a presumption here. I'm doing this. Or seventy five year old Stephen. You're doing this because you want to be stronger tomorrow than you are today.

1:06:42 For thirty three year old, Stephen. So that's my way of thinking about it. I I never did this for future me. Maybe maybe some people do, and that's probably not a bad exercise. That's probably a bit of wisdom in that. I wasn't that smart. So you would you would save five thousand dollars a year. Well, in those days, so my first professional job paid me ten thousand dollars a year.

1:07:05 And I saved five thousand. Yeah, I saved half of it. Going back to this point of compounding. And how in uh how important it is to start investing in things that will offer you compounding returns. If you started

1:07:18 investing five hundred dollars per month And you got an annual return of eight percent because you're investing in some of the things that we'll talk about in a second. In thirty five years. You will be A millionaire.

1:07:34 You'll have more than a million dollars. You'll have one point zero four three million dollars. Over those thirty five years, you would have invested about two hundred thousand dollars, but you would have made eight hundred and fifty thousand dollars from the Interest over that period of time. Just to be clarified, not necessarily the interest, but the growth. Is that eleven percent is not interest?

1:07:56 It's it's great. Some of it might be uh Dividends in the case of which is a f kind of a form of interest you think of. But it's not just just To be Technically correct.

1:08:07 Right. Which which is interesting. So if if I was When I was born If my parents had put five hundred dollars a month away in a investment that we'll talk about now.

1:08:19 Mm-hmm. By the by the age I am now. I would have roughly been a millionaire just from Than putting five hundred dollars a month away for me.

1:08:26 It's pretty crazy. Yeah, but that's the power of About it. I mean the you know, it's it's very gratifying to me that twice a year I I'm a guest lecturer for a friend of mine who's a professor at uh

1:08:39 University of Colorado and Boulder. And it's always fun to talk to her students'cause they're exceedingly bright. They ask great great questions and it's just Stimulating for me. But I think about these young people, I mean these are eighteen, nineteen, twenty year olds.

1:08:54 We're thinking about doing this stuff. At that age. And the remarkable amount of time that they have for this compounding to work for them. It's just incredible. They are gonna be so much better off than if not.

1:09:10 Um so Let me throw out a tip for for you if and when you ever have kids and for anybody who's listening who has has young children. No, as your kids start to grow And hopefully They get

1:09:23 Part time jobs, right? They start Whether it's shoveling snow or busing tables at a local restaurant or whatever it is. And they start earning some income. Well you can

1:09:34 Take that income and up to I think it's seven thousand dollars is the limit now. Put that in a Roth IRA. Which will never Be taxed. It will grow tax free.

1:09:48 For ever. And they're gonna be by definition,'cause they're making almost no money in And they're not paying any income tax, so you don't need any Any deduction from that. And it doesn't have to be their money. So let's say your kid makes three thousand dollars during the course of a year.

1:10:04 You can take three thousand dollars and fund a Roth IRA for them. Imagine just if they never added anything Other than that, you know, you do that until they g they You know, that baseline is gonna grow tax free for an extended period of time.

1:10:22 That's one of the Great keys to wealth building is just Time. And and w is that advice that you still believe in that people should be saving fifty percent of their income? Yeah, I think it's a good rule of thumb. It gets you to financial independents in a pretty reasonable depending on what the market does.

1:10:39 in say a ten to fifteen year Yeah. The pushback that you might anticipate is from people who say that's impossible. Nobody can save fifty percent of their money. Just that's that's that's silly. And I'm sorry, but

1:10:52 I've did it and then I've now at this point I've known countless people have done it. So It's certainly you may choose not to do it. But it's certainly possible. Let's say you're earning Forty thousand dollars.

1:11:05 A year. Which is the low end. The average medium house. So that'll be let's say three thousand dollars a month. So you You're earning three thousand dollars a month, you're then gonna pay tax on that.

1:11:16 This is what my my math says here. It says very little tax would be would be paid. After all of your taxes. And so you're still you've still got roughly three thousand dollars a month, about two thousand nine hundred. Um which you you would take home. But

1:11:30 I so I would need to save one thousand four hundred of that, which means my total expenses need to be one thousand four hundred a month. So first thing I need to do is live Somewhere very, very Affordable. Depending on where I live you know, what city I live in. Then I need to basically radically reduce my my expenditure. Right.

1:11:49 To be able to say fifty percent a month. And I guess the question is most people would assume they wouldn't like that lifestyle. They wouldn't like to prepare their own lunches every day. They wouldn't like to not have a Starbucks coffee. They wouldn't like to live in a small, small shoe box. And probably socialise a lot less.

1:12:06 So I guess that's the key rebuttal is. I guess, yeah, it's possible. There's a chapter that talks about this with an even lower Uh because when I was writing the book

1:12:16 Um I think I Used a twenty five thousand dollar. Annual income. So the math works. Is is it easy? No. But it goes back to fundamentally

1:12:28 What is it that you want? You said well I may not want like that. I said I may want to have lattes and all these other things. Well, That's your money, that's your prerogative. But Time is gonna happen regardless of what you do.

1:12:42 And if you Say instead of having those things now, I'm gonna spend my money on buying my freedom. You will get to the point where everything is free, including those lattes. So let's talk about investing then. Um we have two buckets here on the table.

1:12:59 For an analogy. Around. Tax advantaged investing. I'm gonna take your lead on this. Okay, so if you dump that bucket in there, I'll dump this bucket in here.

1:13:17 Okay. The idea is Th. And then I'm gonna speak in terms of the United States. The government Provides

1:13:27 savings vehicles that are Tax advantage to encourage people to acquire money for their for their old age, right? So in the United States there's things called four o one K or four three B Uh these are employer related plans where you can Divert part of your income and the government specifies how much you can divert.

1:13:51 And they won't tax you on that. And you put it into an investment bucket, into an investment account of some sort. You get to choose how you want to invest it. But that would be the bucket. And that means that if you had however much money this represents uh went into your four oh one K or your IRA, which is something you would do On your own privately, which is also tax advantaged.

1:14:16 Right. So In the example that you've just had uh handed me, they're saying Th this would represent twenty thousand seven hundred fifty dollars, which is Uh before tax and

1:14:28 with a match. So four one K's companies will frequently match part of your contribution. So you say I'm gonna do five percent and they might say, Okay, we're gonna match the first two percent or whatever, which You should always take advantage of'cause that's that's free money. So this is not text. Immediately.

1:14:47 And you invest this money. Let's say you invest it in a total stock market index fund, which would be my recommendation. So you get to invest all this money in your total stock market index fund. If instead you do it After you pay taxes on the same amount of money. Well, by the time you pay taxes you're gonna have about half of what it was before, which is ten thousand thorty dollars.

1:15:10 Which is what Represented in here roughly. half the number of of gold coins. No. Both of these things grow at the same rate because we've invested'em in the same thing, right?

1:15:21 So they're making eleven percent a year, whatever it is. So this is obviously gonna grow into a much bigger pile. at the end of thirty years or forty years or whatever it is than this is'cause you're starting with a bigger pile. So that's the advantage of Deferring taxes. Now the thing that people

1:15:42 And not to think about or talk about. That's incredibly important is But It is not avoiding taxes, it is deferring taxes. Which means that ultimately the government is gonna want their money.

1:15:57 They're gonna want their cut. And typically that happens I think in the United States the age is seventy three or something. When you're required to begin taking money out of these accounts is called an RMD a required minimum distribution. So If you haven't started withdrawing money from these accounts, by then the government will s require you to begin

1:16:21 on a schedule based on your life expectancy to start pulling that money out. Because They figure they've waited long enough and now they want their cut. Okay. So it's not tax free, it's tax deferred.

1:16:38 If you start taking this money out before a certain age, and if memory serves me, it's fifty nine and a half in the US Then you will pay tax on it as you do whenever you withdraw the money and also a penalty. Right. So They want you to keep it in at least until you're fifty nine and a half.

1:16:57 But they want you to start taking it out at some point in this case, I think When you're seventy two or seventy three or something like that. And that's when they collect their money. So you say, Well, okay, if that's the case then what am I doing here? Because I gotta pay the taxes eventually anyway. And mathematically if your tax rate is the same

1:17:18 It doesn't matter if you're Tax deferred or not. The end result of amount of money that you have will be exactly the same. The speculation is, and it's true in the vast majority of cases, that when you retire And you start

1:17:33 Living on this money, you start pulling it out, you will be in a lower tax bracket. So you will have to pay some taxes, but you won't have to pay as much as when you were working and you were in a higher tax bracket. So that's the gamble you're taking. Now looking at me.

1:17:50 This didn't work out for me. So I did IRAs and four O one Ks when I was working in my corporate career. We're decide a fair amount of money in them. Now as it turns out. I'm in a higher tax bracket than I have ever been in.

1:18:06 Because of the success of the activities that I do today. I had no idea that that was gonna Happen. And now I'm at that age where I have to take RMDs, so RMDs are coming out. At a higher tax rate for me than when I

1:18:22 than the tax benefit I got deferring it. But that's unusual. Most people will benefit from doing this because in their retirement They won't have an income or their income will be very modest. And their tax rate will be equally modest and it will work out very nicely for them. But that's

1:18:39 Basically how that works. That makes sense. It does, yes. And and to try and summarize it, um. In a way that I un fully understand. Is Every month when I'm paid

1:18:49 I have an opportunity before that money comes to me. To invest some of it. And around the world, whether it's Japan, Switzerland, India, South Korea, Germany, Australia, UK, Canada, there's always some kind of system to do that. Yeah. So I can say okay, I'm gonna get paid A thousand dollars this month. I'm gonna put a hundred dollars of that before I even get it into one of these investment accounts.

1:19:13 It's not going to be taxed. Until And your employer might match part of it or all of it. Yeah, so my employer might Also add A hundred dollars to it or or part of it.

1:19:23 That's gonna compound over time. I can take it out whenever I want, but if I take it out early I get a penalty. And you pay tax. And I pay tax. But assuming that I'm not gonna be earning as much as I do now when I'm older.

1:19:36 When I take it out at sixty five years old. I'm still gonna pay tax, but a low rate of tax. There's no penalty at that point, but and presumably you'll be at a lower tax rate, right? So it really only works if you're at a lower tax rate when you're older. Exactly. So most people work and then and then they retire at a certain age. And that income from their job goes away. So by definition, they're in a much lower tax bracket. So for the vast majority of people, this works out very nicely.

1:20:04 And you talk about w You know,'cause people will We'll still have to make a decision what they want to invest in. Right. Wh where do you think we should be investing our money at this moment of time? The yet for the average person. What what should they be putting their money into? With everything you see happening in the world? Yeah. You said not Bitcoin, but

1:20:22 Wh where should we put it? I'm an advocate of investing in broad based low cost stock index funds. What is that? That is An example of that is VTSAX, which is Vanguard's Total Stock Market Index Fund. It invests in virtually

1:20:38 Every publicly traded company in the United States of America. That's The number of those varies, but it's roughly thirty six hundred companies. So you're basically investing in America. There are a lot of private companies that I But I'm in every publicly traded company in in the country.

1:20:56 And that means everybody from the factory floor to the CEO is working to make me richer. Now some of those companies are gonna do Extraordinarily well. And they're gonna succeed dramatically.

1:21:09 And because this fund, as most funds like it are Is cap weighted? And I'll explain that in a minute. The more successful the company is, the more of it I will own. So cap weighted simply means

1:21:24 That the largest Larger the market capitalization of the company is Evaluation. The valuation, right? The Market capital the larger that is, the greater the percentage of the fund it will represent. So you may have heard people say that

1:21:40 The top ten. companies in the S P five hundred. Have an outsized representation. Uh percentage wise of what they well, that's the reason it's it's cap weighted.

1:21:52 So I benefit from that success. Right. Now if one of those companies falters And

1:22:03 Or a more aggressive, better organized competitor comes along and displaces them Then they will drift away. But I'm okay with that because whatever that new competitor is, I don't have to predict who it is. I will own them.

1:22:21 And that's a process that I refer to as self cleansing. I'm very So a great example of that is Sears. When I was a kid, Sears But Sears was the Walmart and Amazon of its time combined.

1:22:39 But Sears at the turn of the last century, the turn of the eighteen hundreds Brick and mortar stores. But there are all these people living out in rural areas who are never gonna get to our brick and mortar stores. We could send them catalogs. Does this begin to sound familiar?

1:22:56 And then they could Send us letters. and money ordering things from our catalog that we could then ship to them. So they became, you know, Walmart with the brick and mortar stores and then Amazon of its time absolutely dominated for a hundred years. If you had said to somebody when I was

1:23:15 first uh investing in the s nineteen seventies. But Sears Sears built the Biggest building on the planet. back in the seventies, uh what was then known as the Sears Tower in Chicago. If you had said Sears

1:23:29 Its days are numbered. I You would have been laughed at. But its days were numbered. because leaner, more aggressive competitors came along and ate its lunch. Nobody could have predicted that, certainly not me.

1:23:43 But I didn't have to if I own the index because then Walmart came along and then later Amazon. And Sears faded away. I own those as well. That's that self cleansing process. And just for anyone that really doesn't understand this at all, you're not actually having to do anything because that index fund is just automatically making the decisions. Exactly. I don't have to do anything. I just have to own it and I can own it forever. So if I went and I bought Sears stock as an example back in the day.

1:24:12 Well whatever you own an individual stock You're gonna be thinking about, okay, how long am I gonna own this? And what is gonna trigger my sale of this particular asset. And what I mean, what has to happen to it that would make me not want to own it anymore? And then if I want to get rid of it and I want something in the same space, what do I buy? Do I buy this new upstart Walmart?

1:24:35 You know, do I buy this Amazon that back in the nineties is run by this wacko guy, Jeff Bezos, who kept saying, no profits don't matter, profits don't matter. What quite who who invests in a CO that says profits don't matter? I mean that's nuts. But those are the kinds of things you have to be have to be thinking about if you own individual stocks. I don't have to think about any of that, only the index. Because if Jeff Bezos Turns out that his wackiness is brilliance.

1:25:02 Which it turns out it was. Then he's gonna rise to the top, which it turns out. Amazon did. And I benefited from that. If it turns out it was just wackiness, it would have just faded away as a lot of companies have. But that wouldn't have mattered because

1:25:18 Whatever succeeds I will I will own and benefit from. I was asking um the research team beforehand. In the last ten years, which index fund has performed the very, very best. And it said that the Nasdaq one hundred

1:25:35 Which is Very tech heavy. Right. Has performed at almost 20% a year for the last 10 years. And when I think about what's going on in the world at the moment and the advent of this new technology called AI, Which is driving everything, it seems. And our lives are gonna become way more technological with robots and automation and Full self driving.

1:25:54 It appears to me. Like if there was ever a great time to be investing in an index fund, one should aim at the very tech heavy index funds like the NASDAQ one hundred. Mm-hmm. Is that is that is that Logical thinking or is that it's it's logical think yes. So first of all it's logical thinking.

1:26:11 And actually had you done that same analysis Ten years ago. than uh VTSAX, right? Because technology has absolutely dominated for the last ten years. It is a reasonable speculation that that will continue into the future.

1:26:30 Well because The Truth is that technology has not always dominated. Well no, but the point is that that

1:26:42 It changes. So just like In my Sears example, Sears would have been at the top of the index. For a long time and then it drifted away and got replaced. So that's an individual stock. Sectors of stocks. Have also done that.

1:26:57 Over Time. Right. So right now the dominant sector is tech. Wasn't always the case. Might not always be the case in the future.

1:27:08 I don't know'cause I can't see the future. I understand people who would say that But Clearly that's the best bet to go with tech. And

1:27:18 Your crystal ball is clearer than mine and you might very well be right. But I don't have a crystal ball. And I don't have to worry about that owning the total stock market because if you're right, I will still benefit very nicely. Thank you very much. If you're wrong.

1:27:36 Whatever replaces it. I will own. So you have an analogy you came up with That involves beer. And a glass.

1:27:44 Right, but probably came up with a drinking beer, but go ahead and Show me the analogy. Yeah. So Thanks for that. I was gonna say thanks for not shaking up the camp.

1:27:57 So Beer, right? So I'm pouring it right down the middle so we get a nice thick head. That's even a little thicker than I hoped for. Okay. So

1:28:09 Imagine for a second, right now we have a glass and we can see exactly how much foam there is and how much actual beer there is, right? But imagine this was that I port it into this vessel instead where we couldn't see that. The analogy is the stock market. So when most people think of the stock market and when most people turn on

1:28:31 Uh C N B C They turn on you know, they look at at at the investment news and what have you. It's all this churning and trading, you know, what stocks are hot now, what stocks are rising, what stocks are falling, which you know, it's all this trading. That's not the simple path to wealth. That's

1:28:50 The foam. Right. So the value in a stock Whatever the stock is. What makes up the

1:28:58 Price of that stock is a combination of two things. It is the beer. And it is the foam. And the problem is unlike that glass It's in a vessel like this.

1:29:11 So it's hard to see exactly how much beer there is. As opposed to how much foam there is. And the beer is the value, the foam is the speculation. Exactly. The beer is the fundamental operating value of the company. Right, the sales and the expenses and the money that's left over that you call profits, right? Yeah. So that's the beer. The foam is what the market Determines

1:29:38 That's worth at any given moment. Based on emotion. And based on hype and speculation and fear and greed. And so up here is the total value of the stock. Right, exactly. The toll value of the stock.

1:29:53 But this is all foam that can come and go very quickly. Right. So Think about Tesla, for example, right? Tesla. has a lot of foam.

1:30:05 'Cause a lot of people are speculating about the great things Tesla's gonna do in the future. Robotic cars, humanoid robots, you know, all these kinds of things which very may well come to pass. I mean Elon Musk is a Stunningly brilliant guy. So

1:30:22 Who knows? But That's the speculation. That's the foam. The underlying beer of Tesla, the actual operating company does not justify the price of the stock. I mean the the P ratio of Tesla you can look it up is some huge number, right?

1:30:39 So There's a lot of speculation, a lot of foam in Tesla. No. If things go to plan, then that foam will become as as in our example, you notice the foam is dissipating, we're getting more and more beer.

1:30:54 If things go to plan for Tesla, that's what will happen. The foam will will eventually settle out into more and more beer. And Tesla will justify that high price and maybe then some. And I guess Warren Buffett's greatness. if I've interpreted his writing correctly and why he was often considered as the greatest investor of all time, was he was able to pay

1:31:15 for stocks where it was mainly beer and he paid at the price of the beer. No. Or he he look for times where The sentiment was so negative that That's

1:31:27 He was actually paying a little less than The price of the beer. Benjamin Graham, who who wrote uh The Intelligent Investor, who was a mentor to Warren Buffett uh basically said what you should do is look for value companies and try to determine where the beer is and then try to see if you can Get a buying opportunity, watch it where you can buy it for less

1:31:51 than the actual value of the operation. That's ideal. And in those days when there wasn't so much information freely available, that was probably a little easier to do. Well, Warren Buffett has said since then, and that's a great foundation if you're gonna Pick individual stocks. But what Warren Buffett has said since then is he learned and I think

1:32:12 You don't quote me on this, but I think it was Charlie Munger who actually made this point to him Yeah. It's gonna be very, very hard. In this day and age. even when they started back in the sixties.

1:32:25 To find companies where you can actually buy it for less than the actual beer value. So don't try to do that. Just try to find companies. That you can pay a fair price for

1:32:39 that have a lot of beer in the mix that are mostly beer. Because if you buy those companies, they are by definition Very well run companies. strong brands, big motes around them, which makes them hard to compete. I guess to to do this you you're gonna have to have a framework for valuing a company. Exactly. And you're gonna have to have great

1:33:01 Discipline. Which is Yeah. And that's what, you know, as Warren Buffett said, I was blessed with an ability To allocate capital effectively. And that's basically what he has done, he's

1:33:15 has capital and he is uh got the ability to look at different companies And say of all the different companies I could allocate capital to He's pretty skilled at at picking the ones that are are the best bets. One of the things that I really admired about Warren Buffett was his ability to do nothing. Which is one of the key things because that goes back to Charlie Munger's thing, don't get in the way of your compounding, right? And there has been recent times where I think we can all think of where

1:33:44 Using your beer analogy. Something happens in the world. And The true value of a company. is higher than the selling price. I, if you go back to March 2020 during the the market sell off when the pandemic happened and everybody panicked,

1:34:00 Amazon, for example, the stock briefly dropped below roughly to about one thousand five hundred Dollars per share. Mm-hmm. Value. Um because people were panicking. Right. Uh and then it quickly rebounded again past

1:34:13 Three thousand. Dollars a share. Theoretically, if you had noticed that drop You could have made a hundred percent return on your money.

1:34:22 Um extension the whole market did that. The whole market dropped right. Yeah. So you could have done that with your index fund. This is why if you panicked and sold Yeah, I'm gonna go. And you panicked and sold. Well you would have you would have lost everything and then it it recovered. So it works both ways. That's why I said earlier in our conversation you you have to stay invested.

1:34:48 So that the dip doesn't matter. And if anything, take advantage of the dip and buy more. So you own Amazon you see a dip. You say, Well I still believe in the company. I still think it's a good company and it's got a good future. Or then maybe you buy some more in the dip and you do Still better. But the important thing is you don't sell.

1:35:06 When it's down because there's panic in the air. And I think this is um this speaks to a br broader sentiment throughout this conversation, which is to do what others don't do. You know, and Warren Buffett's famous for saying, Be fearful when others are greedy and greedy when others are fearful. But generally The sentiment on social media, especially for younger generations and especially for men, which is supported by the data. Is that

1:35:28 The way to make money is by like trading crypto or by I mean there's so many people that so uh this is such a we need to address this. You know, it's a platform So that's going you know, people sometimes say to me, you know, I never invest in the stock market, it's just gambling. I say well

1:35:48 You're half right. Our foam is all dissipated. But if there were still foam here, I would say yes. If you're doing it short term And you're playing with the foam? Absolutely is no different than going to Las Vegas. If you're investing for the beer, it's an entirely different story and you're investing for the long term.

1:36:06 And there's lots of young people that are being Tempted into buying a course. That's gonna help them learn how to trade. That's great for the people selling the course. There's such an there's such an incredible

1:36:18 Like I'm obvious. Irony to the idea. The I have some secret. About trading.

1:36:26 That's really gonna make You know, that is capable of making one wealthy. Right. And I'm gonna give it to you. Or even sell it to you. Why would I need to if it worked? Right.

1:36:36 Like this is such an obvious question to me. Like why would I need to sell it if it worked? Good question. I mean, you know And I feel sorry, I have great empathy because the people that buy these things are people that are desperate to get out of their financial situation and they run out of options and so it's very compelling to hear that there's some secret But you can predict the stock market. It's very compelling. You know, in another interview I I said one time we were talking about And I said, You know I blame my mother.

1:37:04 I would be a lot richer if she hadn't instilled a conscience in me. You know? She's cost me millions of dollars instilling this consciousness. I I could have courses, I could be yeah. But no. I am saying that there is a path That will give you great results.

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1:39:27 Do I need a financial advisor? 'Cause a lot of people uh listening now will be thinking, Yeah, I will figure out my money situation when I have enough money to pay a financial advisor. Yeah, I think Uh my attitude is by the time you know enough. To choose a good financial advisor which is no easy task and

1:39:46 You probably know enough to do it on your own. At least on the investing part. Now they're Are there life kinds of decisions where maybe advisors would be More useful. But again you have to be Careful.

1:40:01 And and it takes you you need to really educate yourself as to how advisors get paid, for instance. My answers, by the way, are colored by the fact that I I hear so frequently from my followers about bad experiences with financial advisors. So I have a negative opinion. To be fair, I know there are good ones out there and all due respect to those good ones. But let's suppose you have a a financial advisor Who gets paid

1:40:28 Based on the assets under management. Right. The amount of the amount that you've given them. Exactly. Right. So maybe it's one percent. So you give them a million dollars and they get one percent a year to manage that money for it for you. That's supposed to go to that advisor. And you say Stephen, I've

1:40:46 I've been thinking about paying off my mortgage. I've got a half a million dollar mortgage on this house. It's six percent. Let's say it's five percent. So in that middle range, it's five percent. I'm thinking about paying it off. What do you think? Okay. Well now.

1:41:01 Stephen has a bit of the lever because He can certainly give you the most accurate financial advice he is capable of giving you in answering that question. But If that leads him to say yes, pay off the mortgage,

1:41:17 He is Just reduced his income. I have. Because when you pay off that mortgage, half a million dollars is gonna go out from his management and paying off the mortgage company. So you have just asked Steven to give you advice potentially that is bad for Steven.

1:41:35 No. If Steven's uh Honorable. Capable honest guy, then maybe Steven does that.

1:41:43 But let's suppose Stephen Has two kids in college. But suppose Steven just bought a boat. Let's suppose Steven is going through a divorce. What

1:41:57 Think about that, and maybe Stephen, as honest and capable and and decent as he ordinarily is, has financial pressures that might Play a role. Right, there is a conflict of interest frequently. So you have to understand how your advice is being paid. How?

1:42:14 Does your portfolio look? Where have you allocated your money in terms of percentages? How much money do you have in real estate versus cash versus Index funds. Well, I don't even think about about the real estate. We have this uh cabin in Wisconsin on the lake and then we have a condo in Florida. Um

1:42:31 They're both very modest, so pretty small part of our net worth. I like to buy things from a position of power. My stocks I'm probably about eighty percent in in uh VTSAX, total stock market index fund. And probably fifteen percent in bonds. The total bond market index fund and then the other five percent in money market fund.

1:42:57 I keep some money in uh the checking account to pay the bills. And to break it down a little further for you. My wife and I both have Ira's, we have a regular R and a Roth IRA. So there are four I I IRAs. All four of them hold VTSAX,

1:43:14 We have taxable accounts and Part of that is VTSAX, part of it is the bonds. What is a bond? A bond is money that you have lent to a company or to the government. So

1:43:28 When you buy a bond you are essentially lending money to uh a company or a government entity. So they pay you interest? So y the you will they companies and the government sell bonds of various maturities. So they can be very short like a money market fund is basically very short term. Bonds.

1:43:50 Yeah, like thirty days or less, right? Which makes it the equivalent of cash. But you could buy a uh a certificate of deposit as a kind of a bond. So you could buy one of those for three months or six months or a year, five years, ten years by US Treasuries going out thirty years. Why would I do that instead of buying the index fund? So the index fund is stocks. It's it's very stocks as we talked about Big growth engine, great long term, very volatile. So if you want something to smooth the ride. Bonds are not very good for long term growth, but they're not nearly as volatile.

1:44:25 Are they so they're safer? Short term, yes, because they're less volatile. Long term they tend to lose value to inflation. Stocks on the other hand are riskier short term because of the volatility, but long term They outpace inflation.

1:44:41 And so they are safe for long term. So it depends on your time horizon is which is S which is safer. But traditionally people think of Bonds is being safer. And really the way you should hear that is less volatile. And stocks being riskier.

1:44:57 You should hear that as more volatile. So is it broadly true to say that if we exclude your real estate. Seventy percent of your Assets are in stocks, twenty percent in bonds and five percent in cash. Probably more eighty fifteen five. Eighty percent stocks probably phones. Okay. It's interesting because um which would be considered very, very aggressive.

1:45:19 And I n wouldn't necessarily recommend that for most people my age. I thought it would be curious'cause we now have this new alien amongst us called AI. I thought it would be curious. If I went on ChatGPT and I asked ChatGPT the question I'm a normal person who earns Fifty thousand dollars a year.

1:45:36 I want to be financially free in the future. Give me a one sentence answer. Based on All of the wisdom in the world. Taken from every expert in investing ever.

1:45:48 Why the the I know what the right answer is. I don't know what the answer. What do you think it's gonna say? Read the simple path of wealth. I don't think that's what it's going to say, but that's all right. And the the simple path of wealth talks about three principles, right? Right. What are those three? Through I'm gonna check it against what it says. Avoid debt. Yeah.

1:46:03 Live on less than you earn invest a surplus. It said. Focus on saving. And consistently invest in low cost broad based index funds like the S P five hundred while living below your means and allowing compounding to work over time. I then asked another question.

1:46:21 How do I earn more? I should sue them from mining my book. They probably did. I said, How do I earn more? What do you think? Earn more in a job or I just asked a very broad question, which is I now and now how do I earn more? was my question. I would say develop develop your skills. Okay. Yeah.

1:46:43 Focus on developing high demand skills. There you go. Seek opportunities for career advancement, explore side hustles or invest in assets that generate passive income like real estate or dividends. But I really think that you know, I really think there's a really important part there about Developing high demand skills. What are those gonna be in the future? Yeah. With AI. Because programming, for instance.

1:47:06 used to be a very high demand skill and people said learn how to program. Yeah. From what I understand in the age of AI, yeah, that's not so much. I even think about my own life. At eighteen years old, I started learning about social media. I dropped out of university doing my business management degree after a one lecture and I started learning about social media because I was building a business in social media and technology. And although that first business failed I I was Nineteen years old.

1:47:32 In two thousand and what, fourteen or something? really understood this thing called social media. Which led me to spend a year as a consultant flying around the world to all these companies, doing social media. One of those companies around and said, It's been so great. Could you turn this into a company? I said, No, I've been through the Found a PTSD of starting a startup, I don't want to do it. Three months later I said yes, turned into a company called Social Chain, and that changed my entire life. That worked out well. high demand skill. I had, even though it failed

1:47:59 I had this high demand skill that was honestly at the time pay me seventy thousand pounds a month. You probably had it because you went through the process of failing. Yes. Failure is you know, it used to be in some cultures. That if you failed once that was it, you were a pariah. Nobody would even look at you anymore. Failure in our culture is just a stepping stone. I've heard venture capitalists say they won't even look at an entrepreneur.

1:48:22 Fund if they haven't failed at least once. The advice I'd now give to my kids based on that is I would ask, if my kids came to me and said, Dad, what should I go learn? I would say Yeah. Go and work. For a startup. I said startup because you're gonna be very close to the CEO and founder.

1:48:40 Because there's gonna be less desks. So you're gonna be closer to to the proximity. That is failing. At the cutting edge. So if it's AI, I'd say go work for an AI startup. I I probably not gonna work out. You're probably gonna be the company be bust in a couple of months' time. But you're gonna be so close to the failure. You will learn so much. Yes. I wish somebody had given me that advice. And that's that's like in in a way, I guess a roundabout way what I did is

1:49:05 I started a company that failed at the very forefront of a wave coming into shore, which meant that as I hit You know As the wave crashed down and I was left there on my surfboard, and I had this high demand set of skills that people were like Begging me. Mm.

1:49:19 Which set m myself up and frankly. The director. Would not be successful. Had I not spent the previous Ten years.

1:49:28 Understanding how social media, content creation, Growth. Work. Mm-hmm. Is there a favorite story in this book of yours? Well, there's so many great ones, so

1:49:40 I I already I already alluded to my favorite one, which is my friend Tom. Yeah, because he is I mean, Tom was a guy who got to the age of sixty two, he'd been through multiple divorces, he Lost his house to foreclosure, he lost his job and He was broke, he went bankrupt, and yet

1:50:00 His life has turned out That's my favorite story. But Th one of the reasons I like this book so much and one of the reasons candidly I did it.

1:50:13 Is if you read through it you will find there are some stories from PEROS who made big incomes and they read the simple path to wealth and apply didn't work very well for them. But There are many, many more stories of people who have accomplished this

1:50:30 From much more humble beginnings. I mean an example of I have a very good friend of mine. High school buddy. I don't think he's ever made more than forty thousand dollars a year.

1:50:39 He is financially independent. because he follow the basic principles that I talk about in that book. I have a different friend and he was in the financial business. He was living in Chicago. And over lunch he told me that His Christmas bonus had come in at eight hundred thousand dollars.

1:50:56 That's back in the mid nineties when that was real money, right? And he was already making, I don't know, a million dollars a year or whatever it was. Big income. And he was broke.

1:51:08 And Yeah, Most people listening to this are going to say, What are you talking about? This guy got a bonus for eight. People paid me eight hundred thousand dollars for a year, he'd be done forever, right? And the the that'd be my nut, I'm good. How can he be broke? Well when you listen to him talk. About

1:51:24 The house. The cars. The schools. And you start doing the math, you realize that No, his income is not enough.

1:51:33 He's Barely. Barely. Making it. So here's a guy with a big income.

1:51:39 Who is? Unless he changes his ways is never gonna be financial independent. Yeah. Here's my guy with a Tiny income comparatively.

1:51:48 Who got there? I've come to believe that That a large income Actually can be an impediment. Yeah.

1:51:58 And my reasoning for this is that I think people who have a large income Are much more likely to be drawn into the competing with the Joneses scenario? Because they associate with other people who have large incomes and they're all driving a certain car Living in a certain neighborhood. Sending their kids to certain schools.

1:52:16 And that probably becomes very hard to disengage with. And making it perhaps even Less likely that they are gonna decide to spend a large portion of their income on on buying their freedom. Whereas

1:52:30 The people who make less money probably don't have those same social pressures and are more readily able to do it. So starting from humble beginnings is no obstacle. And that's was the point of doing Pathfinders. Interesting. It does track that.

1:52:47 I think The goalposts continue to move in different ways and yeah. I guess you go from competing to the Joneses to competing with the size of someone else's yacht, which is All slippery slopes to bad places. Or your own or or your own demons. As we talked about earlier, right?

1:53:05 Yeah, you mentioned a word in there as well. You mentioned I think you were talking about your friend Tom. Tom had a divorce? Multi divorces, yeah. I which is bad for your wealth. Yeah, I didn't re I didn't r I didn't realise this'cause I've never been through one before. Um, I spoke to uh James Sexton on the show, who's a divorce lawyer, who kind of opened my eyes to it.

1:53:24 But actually I had a private conversation with a friend here in New York City. I'd say a couple of months ago, who's going through a divorce. And he's he sat me down and he talked me through the specific consequences of of divorce that he's going through. He said to me, he's a very successful person, I reckon he's probably worth five hundred million.

1:53:43 Right. He said. The divorce. Proceedings.

1:53:48 For five or six years. So I'm I'm having to go and see lawyers all the time. And he said to me as well that he is paying for her lawyer. Which I was I I didn't really understand, but he was like, No, I have to also cover her lawyer costs because You know, I'm the the breadwinn winner, so she doesn't have money, so I'm covering her lawyer costs, but which is what I have to do. And he said the law firm

1:54:08 have gone from being a very, very small practice in those six years. Now they have a massive building and he goes, I know It's my money. He literally is like I have paid for her lawyer and now they're doing really, really well. And they're milk this this case. They're drawing it out. They have no incentive to this ending, yeah. So he's like, I've spent tens of millions on her lawyer who is basically dragging me Um and now they've got this massive building. What else did he say to me? He said Because some of my assets are subjective in value, like my company

1:54:40 Her lawyer is inflating the price of my assets because she's gonna get half of whatever they can convince a judge my assets are worth. So he you know, for his example, his business might be worth a hundred million, but the lawyer is making the case to the judge that it's worth five hundred million. So that she gets two hundred and fifty million. He also said to me Which really isn't there. Which really he doesn't have. And then he was saying to me, he goes, You know, I bought this particular stock. So he is certainly interrupting, but now he's forced to fight it. He's fighting it. He can just say, Okay, she can have half. Yeah. Because This is a judgment. that is gonna create a a an obligation on his part.

1:55:18 For assets that don't actually exist. So it's more than half. She could end up taking sixty, seventy, seventy five. And the other thing he said to me, which was quite sad, he was like, You know, I was one of the fur he was one of the early investors in a big company that we all know. And um He said to me, I bought that stock fifteen, twenty years ago. It's actually quite emotional to him that he was so early in back in the company. And now he's forced to sell that. So he has to liquidate Investments he made twenty years ago. Because again, she's entitled to half. And that'll be a huge tax hit.

1:55:48 A huge tax hit. Right. And I think some people don't realise that wealthy people can Yeah. A loan against That stock without ever having to sell it. Right.

1:56:00 So he's probably if he's not He's probably got a big loan against that stock. Probably a fifty percent loan. So just for an anyone that doesn't understand this, because I only understood this in the last couple of years where I where I started doing similar things, is if the stock is worth a hundred million, he can get fifty million tax free from a bank. just by keeping that stock there and really never have to pay it back because it's such a great stock. Um

1:56:23 And It was also just looking in his face and just seeing the stress and the toll of having to go to court all the time and fight this thing for six or seven years. And I thought, wow. We we give people financial advice all the time about the best stocks to pick or invest in index funds. We don't talk enough about the

1:56:40 How divorce can just destroy your life. Yeah, you have to be so careful in choosing your spouse. I've had pushback on that and the people say, Well that you choosing your spouse is not a financial decision. It's you know, it's emotional, it's romantic, it's well yeah, it's all those things, but it You better take finance. into account for all the reasons that we're discussing. This also, by the way, loops us back to an early part of our conversation where

1:57:06 Does money buy happiness? Does you know being richer Is that always necessarily better? This guy is more of a target because of his wealth than he would be if he So is his money really making him happier at this point in his life? Yeah, probably not so much.

1:57:23 I know. You know, and he's he's gonna be fine either way. Like sure. You know. Um which is a point. Well he's gonna be fine financially, but emotionally it's he's still Kind of. Go. And she's probably going through it too on the other side. Yeah. And uh the other point of n nuance here is that she did

1:57:43 Raise The four or five. the the three or four kids. Yeah. While he was off building the business.

1:57:50 But you know, twenty odd years. So One could argue that he wouldn't have that wealth without her being at home to look after the kids, and she'd made huge sacrifices to her own career. Yeah. So, you know, is balance. But I I just think with um

1:58:04 James Sexton said to me. Even if you don't get a prenup. There's still a prenup. You either use the government's prenup? Which is Or you create your own. Or you create your own. Either way, there's a prenup. Absolutely. Do you want to let some judge

1:58:17 decide or do you want to be intentional before you get married with your partner about how things will be split? And even when I think about my partner at the moment and we're probably gonna get married soon. Congratulations. Thank you. I haven't proposed just yet, but I'm working on it. But I'm on this time, so this is the one episode you should watch. True. Well I'm very fortunate as if this spring I will be married married forty four years.

1:58:47 And I I tell people I'm I married my wife out of the gate. Do you have a framework for choosing The person. or for sustaining for forty four years,'cause I'm what, six, seven years in with my girlfriend, but

1:59:01 You got forty four years in. Funny story about that is People used to ask me, Did you and Jane sit down and discuss money before make sure you were on the same page financially before you got married. And I always used to say, you know, it's a great idea. You should do that, but no, we never did that. I just I just got lucky.

1:59:22 You know, we never talked about it, but as it happens we got married and we were very, very compatible financially, which we are. But Just got lucky. Well I told that story in front of her one time. And she leaned back in her chair and she said.

1:59:36 What are you talking about? On our first date you said to me You need to be saving fifty percent of your income. You say, What do you mean we never talked about money? Yeah. I guess that's such a natural part of my persona I didn't even remember doing it. Interesting.

1:59:52 My last question for you is about regret. You said you're seventy five? Yeah. What are your biggest?

2:00:00 Regrets. So I I think regrets are are tricky. And I and I will I'll answer your question directly and it's A couple of things that or at least one thing that But

2:00:13 The reason they're tricky is because there is an assumption, like you re you regret doing A. And you think if only I'd done be. Things would be better. But you don't know that that's true. You might say, Boy, I regret starting that company that failed because it was a failure.

2:00:28 Well, yeah, but it led to something much bigger. You learned so much. Now maybe if you'd said instead of starting that company that failed Maybe I took this high paying job and and I worked my way up through the corporate organization. And you'd be sitting there you know, you'd be sitting at some high executive level in this corporation and looking back and saying, Well am I glad I didn't

2:00:53 Do that start up that fail. Right. And yet you're so much further ahead now than if you So who knows? Who knows what choice you made that appears To be the wrong choice. As

2:01:05 to whether it really was. Maybe it was exactly right. Maybe things would have turned out better, maybe they wouldn't. So I'm very hesitant to look back on. There are many things I can look back on and say, Gee I do wonder. What if I'd gone Down the right path instead of the left path. What would that have looked like?

2:01:23 But there's no guarantees it would look better and my life has been pretty damn good, so In that sense I have no regrets. Two regrets I do have. Very personal regrets. I don't I've never shared these publicly. When I was a kid

2:01:40 my father was a very handy guy. He loved Building things, working on the house, that kinda stuff. I was not that kind of kid. And I don't know, I was eight or ten years old at one point. And

2:01:54 Or my birthday or Christmas, I don't remember. He brought me a Bought me a jigsaw. Which is uh For people who don't know, it's a it's an electric saw. It's got a little blade that goes up and allows you to cut wood in very fine kinds of patterns.

2:02:10 Last thing in the world. This kid wanted. And I let my dad know. And he was crushed. Because for him.

2:02:22 It was the best gift he could possibly think of to give to an eight or ten year old or whatever it was. And so one of the regrets and I give myself some grace'cause I was very young and Reasonably you could expect that I didn't have the maturity. To deal with it.

2:02:38 The way I would've. I do regret. 'Cause I could see the pain in his face when I I kind of reject it. That gift.

2:02:48 Right. And maybe that taught me a good lesson in being more empathetic going forward. So again, do I really regret it? Well I regret that I hurt my father. But

2:03:00 I learned something. Pretty valuable. And you've let you've remembered that for seventy years. I've remembered that for seventy years. I've got s similar stories of thing ways I react as a kid in it. I think most people do.

2:03:13 Yeah. Yeah. Sucks. And then my second one, and this is even bigger, I was twenty four when my dad died. And he died of emphysema. And

2:03:25 Slow lingering death. He died in the hospital. And The night before he died, the The day before he died I was visiting him. And um

2:03:37 She was sitting on the edge of the bed. And he said to me uh I'm gonna die now. You know, I'm I'm Gonna die tonight.

2:03:55 Turns out of course he was right. He did. That was the night he died. And instead of recognizing Yeah. This was a moment where He wanted to talk to his son about this.

2:04:11 This Probably the most momentous event that Any of us will ever face Right. Instead of recognizing that

2:04:22 I went to the typical trope of Oh, Dad, don't don't talk like that. You you're not gonna die. You got a long way to go. There you're gonna be fine. I went to all that bullshit. Instead of just Recognizing Whether he was right or wrong.

2:04:38 The the He was facing a momentous thing in He didn't want to hear Don't Don't think about that. Think more positively.

2:04:50 He he wanted to Share with his son. what he was facing. And I regret that I wasn't there for him.

2:05:03 In that moment? But I regret that I didn't get to experience that with him. in that moment. So that's my biggest I can st see it still in your face.

2:05:22 Fift ago. Is there a reason why You think in that moment you didn't Want to go in that direction with him.

2:05:34 Was it a matter of what I wanted. 'Cause it's not like I considered I can either blow it off, which is what I did. Or embrace it and go there with him. I I didn't even think that way. It's not like Yeah.

2:05:48 It's not like I made the wrong choice. I wasn't mature enough to recognize there was a choice. I wasn't mature enough to recognize that. the real dynamic of what was happening. And for that you deserve grace. Thank you.

2:06:05 And I agree with that. But I still regret it. 'Cause h how much better. For both of us would it have been. If I had recognized it.

2:06:17 Jail, we have a closing tradition on this podcast where the last guest leaves a question for the next. What is something That you think is true. But you haven't yet. been able to validate.

2:06:28 I think it At this point in my life. I'm I feel pretty comfortable about what I think is true. Right.

2:06:40 I'm not sure this answers the question, but Um Uh but a good example is I am pretty sure that there is no afterlife. Right.

2:06:52 I I have high degree of confidence in that. But of course, as the song once said, We'll never know by living or may or die and we'll tell. And I am very curious about death.

2:07:07 I am very curious as to Mm-hmm. What is on the other side, if anything. So in a Perverse way, I guess. I'm s I am looking forward to my death.

2:07:21 Right. I I don't want to get there too soon. I mean I'm as long as I'm mentally and physically capable, I'm happy to continue living. Thank you very much. But I do have a great curiosity about death and I'm Almost a hundred percent sure that when I'm dead, that's just it. It's over. But I'm curious. And it'll be interesting if

2:07:41 I die and it's like oops. Yeah, Well there is a guy with a white beard and Okay, I'll just show myself out. Thank you very much.

2:07:52 There is one last question I wanted to ask you, which is kind of just about the subjective happiness. Again, at seventy five years old, you have a retrospective clarity that I don't yet have on what actually mattered. What actually matters. Nothing. Nothing really matters ultimately. Nothing.

2:08:11 Yeah. I think That's kinda like asking what's the meaning of life, right? Um I don't think there is.

2:08:20 a meaning to life. When you look at the scale of the universe, the scale of the cosmos The Concept But

2:08:30 We as individuals. Bear some meaning. It seems to me to be silly. Human beings have been around for Oh.

2:08:39 Two, three hundred thousand years depending on When you define Homo sapiens. I mean that's that's a Infinitesimally small smudge of time.

2:08:52 in that has happened already and that will happen in the future. Even if humans last for Another It will be an infinitely Highly.

2:09:03 Bit of time. Against this huge cosmic Universe. And Our individuality within that is

2:09:12 Infinitesimally small. And I think there's some great meaning behind that seems to be to be the height of arrogance. So I think that if you go through life And You treat people pretty well.

2:09:25 And you have a a pretty good good run of it? I think You've done well. I don't but I don't think there's something profound in that. So what is the point then?

2:09:38 Is there a point? Is that the real question? There is no point. mean the the point is we happen to be here And it can be a good fun ride. It can be a very difficult ride, depending on what you make of it. In in some cases, depending on your circumstances, there have certainly been people in history that have born been born into circumstances that

2:09:59 you know, made it a a miserable existence with no options out of it. I mean, what's the meaning of that? And now you and I and the vast majority of people Listening to us probably I Venture to say a hundred percent of them. have a lot more autonomy over

2:10:17 over how we can make our life. And Will it have great meaning? No, ultimately not. But it's the only life you have and you may as well make the best of it. I actually listened to something last night by a guy called Lucas Jones, who is an actor. Um he has some great books. He's also a poet as far as I'm aware. I'll link his books below. Um but he

2:10:39 he made wrote this poem, which I thought was quite related to that, that I'm just gonna play for you because I think it's kinda captures the essence as well of what you're saying. He starts by saying I saw God on the train. So it's sat far away from the seat he was saying it. Then he got up I think probably to Piss and he noticed me there and said, Oh, what's this?

2:11:00 Him for me. So mate, no, just to come for your seat. It looked at me like I was a kid covered in chocolate, surrounded by rappers saying, Don't know what happened. And you go to May. I've got a few minutes. Tell me what's wrong, but don't fuck around with it.

2:11:14 It shook me then that it fit in one sentence. I said Just think heavens is stupid incentive. Like what a shit life for a beautiful death. And those who are evil can suddenly repent, like a killer or nun, can live like a monster, then right at the end say, I'm sorry, dear God, sir, and end up in heaven right there with my nana. She's doing some knitting. He's waving a hammer. It's like Jesus God, what a horrible deal.

2:11:37 He goes, Yes, fucked I know how you feel. I'm like, mate, you're the one spinning the wheel and he goes, Listen All that stuff, mate. I didn't speak it. Like the old joke says about liars and men.

2:11:49 If God wrote the book, why are you holding the pen? And the rule's I wrote. I wrote on your art. Truth I spoke, you've known from the start, be kind, don't harm. Isn't that hard. Heaven's just life if you're doing your part. You want white clouds and endless skies. Uh yeah. Look around. Don't have to die.

2:12:04 And I probably brings you some pain to think of the dead as just dust in a grave, but humans can't comprehend it when I say Life is the cloud and death is the rain. And I got to my stop and felt kinda mad. Not sure he answered the questions that

2:12:20 And I looked up and saw the sun rising. Said you're looking for heaven. You're the one hiding. Yeah. LJ, thank you.

2:12:30 Thank you for writing these incredible books that I highly recommend to anybody who is On their own journey to financial freedom. And is looking for a free life. Or just independents from one's own. Sho should uh should buy this

2:12:47 But the the simple path to wealth has been an absolute smash hit for Um understandable reasons once you read it, so it's not a good thing. Many millions of copies from what I understand. More than a million copies at least. And I highly recommend everybody goes and starts with this book and then Picks up Pathfinders. I'm gonna link both of these books below. And there is a third book that's slightly smaller called How I Lost Money in Real Estate Before It Was Fashionable, A Cautionary Tale.

2:13:08 Um I'm gonna link all of them below. And if anybody else wants to find more of your work, is there anywhere else that they can get in contact with you, read your work that I should recommend. So probably the easiest thing is the blog, which is JL Collins N H.

2:13:23 At uh dot com. And uh you know, you'll find uh a lot of my rating. I don't write on the blog too much anymore, but The material that's there is evergreen. It's the source material for the books that you were kind enough to share. Uh, the last book, the How I Lost Foney in Real Estate, is if somebody wants to have a laugh at my expense, that's the book they want to pick up. Thank you for doing so much of what you do. Um I know what the comments are gonna say already. They're gonna be people talking about how soothing your voice is.

2:13:50 I happen to agree. Thank you so much. My pleasure. Thank you for having me. If anything we need. It is connection, especially in the world we're living in today. And that is exactly why we created these conversation cards, because on this show, when I sit here with my guests and have those deep, intimate conversations, this remarkable thing happens time and time again. We feel Deeply connected to each other. At the end of every episode, the guest I'm interviewing leaves a question for the next guest, and we've turned them into these.

2:14:25 conversation cards. And we've added these twist cards to make your conversations even more interesting. And there are so many more twists along the way with the conversation cards. This is the brand new addition. And for the first time ever I've added to the pack this gold card, which is an exclusive question from me. But I'm only putting the gold cards in The first run of conversation cards. So get yours now before the limited edition goal cards are all gone. Head to the link in the description below.

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